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October 21 - 31, 2004

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Questions

(Quotes from Ed in Red)

Answers

Sun, 31 Oct 2004

 

Upcoming Weekend Workshop

Dear friends,

I’ve been committed for months to attend meetings in Vietnam later this week so cannot make the workshop, but want to wish all of you a really great time together and trust you will gain many beneficial insights from each other as well, during these upcoming sessions in Reno. (I look
forward to seeing you at next one.)

Best regards,

OK

Sat, 30 Oct 2004

 

Sending Feelings & Paths to Zero Point

Hello Ed,

I have not yet participated in a tribe meeting. I read the accounts of people in the hot seat. I notice feelings are usually solicited in the form of physical sensations (i.e. pain in the stomach, pain in the side, etc) & less in terms of descriptions - such as fear, sadness, anger, etc. I wonder if feelings, in terms of physical sensations, are more informative & useful in the TT Process?

 

Perhaps my sample size is too small to draw such a conclusion. I ask this question with the intention of better understanding the process.

On a different note - I assume individuals, outside of the Tribe, attain states of being & self-knowledge, similar to the condition of Zero Point. I have in mind the Buddha & others of similar nature. I assume they are of the DIM variety, or something other than TTP. Any thoughts on this? I have used the DIM method with limited success. I am excited about the TTP.

You can read all about riding a bicycle, and you can understand all about riding a bicycle, and still not know how to ride a bicycle.

 

Understanding is incidental to TTP. To engage the process, get into a Tribe and onto the hot seat.

 

The history of Buddha (Siddartha Gautama) seems to include numerous teachers, colleagues and students - as well as quality alone time.

 

 

Buddha

 

Still on the Hot Seat

 

Clip: http://www.ibiblio.org/pub/academic/

religious_studies/Buddhism/DEFA/

Art/BUDDHA.GIF

Sat, 30 Oct 2004

 

Position Sizing


The calculation of position size is large for very small differences between entry stops and protective sell stops.

When BS – SS = 0.01, the formula “(Q) = 1/2 % * E / RPS,” results in placing all of ones equity in a single instrument.

Yes. You can mediate this effect by including some "skid" in your risk formulation.

 

In case of stock trading, where margins may approximate 50% of the stock price, you might find your net equity also limits your trading.

 

 

 

Happy Travelers and Traders

 

allow for some skid

 

Clip: http://www.aoc.nrao.edu/

~hdinwidd/skid%20mark.JPG

Thu, 28 Oct 2004

 

Goals / Going with the Flow

Dear Mr. Seykota,


Do you see any conflict between goal setting and going with the flow in one's life? To what extent do you believe we determine the course of our lives.

You can go with the flow to achieve your goals; you may include goal setting as part of your flow.

 

Predestination and Free Will, like Time, do not exist in nature other than as thoughts we use to organize our experience - and occasionally, our religious institutions.

 

 

John Calvin (1509-64)

 

Calvin, a lawyer by training, reorganizes the Protestant church and introduces the notions of predestination, doctrine of the elect and doctrine of living saints.

 

Predestination is the notion that God knows the (non-existing) future and may elect some of us to sainthood while others are not quite so fortunate.

 

Clip: www.kenanderson.net/ bible/john_calvin.html

Thu, 28 Oct 2004

 

Wanting a Reason

Hello Ed,


I find that when I think about the process of trading (where my stops are, leverage), I feel much less stressed (or even no stress) than when I obsess over the outcome (money aspect), i.e. how much I would like the account to grow to.

 

Is there a reason for this?

Reasons are justifications we tell ourselves, sometimes each other, to maintain our identity in a drama.

 

Reasons indicate k-nots.

 

I am willing to accept your experience, without a reason. 

 

 

Be Sure to Fill Up on Reasons

 

in case you need to justify yourself

and / or win approval

 

Clip: http://hackvan.com/pub/stig/

pix/subversive/reason-bran.gif

Thu, 28 Oct 2004

 

Donchian's 'Weekly Rule System'

and 'Two-Week Rule'


Dear Mr. Seykota,

Your FAQ is a very useful resource. Thank you for it.

In your 'Market Wizards' interview you mention "I was inspired and influenced by the book 'Reminiscences of a Stock Operator' and also by Richard Donchian's five-and twenty-day moving average crossover system and his weekly rule system".

What is the Donchian 'weekly rule system'?

In a FAQ entry (Date: Fri, 7 Mar 2003',
Title: Donchian Materials) you write "I once asked him how he came up with his two-week rule ... he said no one had ever asked that question before ... it came to him while he was looking over some historical cash copper prices."

What is Donchian's 'two-week rule'?

Thank you. Best regards.

Donchian's Two Week Rule:

 

Every Friday, note the high and low for the previous two weeks.

 

If short or out, place an order to buy, good through next Friday above the high; if long, place one to sell, below the low.

The Three-Week Rule is similar, as are all the other Weekly Rules.

 

 

Wed, 27 Oct 2004

 

Triangle


Ed Says: Modern society teaches us to suppress our feelings. We learn to hide them, substitute them, disguise them and desensitize ourselves from them. We strive to disconnect our feelings from our logic. People tell us, "you shouldn't feel that way." Men are supposed to hold back tears and women are supposed to hold back anger. ...

When this interruption of the transfer of experience occurs, Fred continues to replay the experience, at higher and higher levels, to try to inform CM. ...

CM may associate the feeling as dangerous in itself and want to block it out. CM may even program Fred to set up a "Judge" to block the feeling, thus creating a K-not, that ties up (knot) the feeling as something not good.

Nevertheless, Fred keeps trying to communicate the experience to CM, and raises the intensity, of the effort. Fred turns up the pressure on the "Feelings Pump." ... Eventually, Fred may resort to engaging the outside world, and arranging a Drama. ... As the drama unfolds, it provokes the very same set of feelings, so you find yourself, amazingly and exasperatingly, in exactly the situation you dislike, again and again.


Ed,


I find myself into longstanding situational drama. I guess I still have some wounds from the past. It has to do with girls. First, when I was about 12-13, I fall in love with a girl and sent her some flowers as I wanted to date her. Her parents didn't allow me as I was told that we were too young.

Then, about 5 years ago, I fall in love with another girl. The problem was that she already had a boyfriend, and concealed the fact from me. I don't know exactly what her feelings about me were like and I felt there was a mutual attraction. Yet I got very, very angry then, and I was very tough with myself and her. I almost caused a disruption in her relationship just out of hatred.

The common theme though is that I have always been very tough with my own feelings out of several negative emotional experiences in the past. Over the past few years I have been trying to re-frame my attitudes and outlook on the emotional life to more positive and receptive ones. Yet, I keep finding myself in the old drama of love triangles. My issue is that the old ticker is already feeling suffocated and tired out of all this and I start to feel "disheartened" about it.

Note: although I used the _expression "love triangle", that may not be the case though. So, a better expression would be "relationship dramas" or something like that. Typically, the girl likes me and not her boyfriend.

You might consider taking your feelings about wanting to be with someone who is with someone else into the process.

 

You might even confer with your girl friend, and with her significant other, if you dare, in the spirit of locating the feelings you have in k-nots.

 

They, too are likely working out their own dramas by having you appear in their relationship.

 

When you become willing to experience your own forms about the matter, you gain choice and might be able to try some new angles.

 

 

 

Menage à Turkey

 

Each bird needs the other two

in order to set up its own drama.

 

Clip: http://www.4huntingdepot.com/

image/products/big-pics/2011606.jpg

 

Wed, 27 Oct 2004

 

Asian Theater

Hi Ed,

I just wanted to introduce myself. I've been reading much about you and your trading style for some time now. I have been working in Asia since 1994 on the trading side for major global brokers. I am curious to know if you work with many traders based in Hong Kong?

 

I see there are a few communities of traders in Taiwan, Australia, and Japan. Japan is one of my main interests. Great long/short market and lots of market activity.

 

I've developed a long/short equity trading model - mean reversion and trend momentum based. Would be interested to hear your thoughts about it at some stage.

 

Just wanted to take this time to thank you for all your great tips and hints from your website.

You are welcome.  People write to FAQ from all over the world.

Tue, 26 Oct 2004

 

Tribe in Melbourne

Hi Ed,


I was reading “Trend Following” by Michael Covel, which I purchased this week, when I learnt about the Trading Tribe. I have looked at trading and personal development as being inseparable for some time. You are right …. it is a good idea to get together with fellow traders to share experiences and therefore to grow.

A guy like you must be very waddling through emails so I’ll keep it short.

My surprise was …. that “Emotional Intelligence” and “Reminiscences of a Stock Operator” were together on your web site, as they are my most prized possessions. This is very encouraging sign for me.

Having suffered from toxic parents and other delusions Amazon will get another order from me soon.

With your permission I’m going to start the Trading Tribe in Melbourne, Australia. Can you put my name on your web site and hopefully other traders in my area will get together.

Yes. Send your contact information, including an email address suitable for publication.

Tue, 26 Oct 2004

 

Which is the more profitable method?

Dear Ed,

Which is the more profitable trading method - buying on the pullbacks or buying on the break-outs?

Regards,

Neither one is a method; both are notions.  They become methods when you integrate them into a discipline.

Tue, 26 Oct 2004

 

Objectivism & 24 Hour Trading

Hi Ed,

Firstly, I thank you for the contribution you make to the trading community. I am not aware of anyone who is helping so much while directly asking for so little.

I have two questions to ask you.

(1) I have recently read Atlas Shrugged by Ayn Rand and truly enjoyed learning about her philosophy called Objectivism. I was surprised to experience a deep positive emotional response to her philosophy. I am assuming you have read the book. I am interested in your opinion of Objectivism.

(2) My partner and I have been developing trading systems and testing software over the last 18 months. We now find we need to make a decision which I hope you might help us with. We have many decades of historical futures data to back test our system but this data does not reflect today's reality of almost 24 hour markets.

 

We have to decide whether to restrict the trading of our system to the day session or to trade the electronic sessions as well. In our opinion the 24 hour trading has not been around long enough for any valid historical testing. While I can see advantages and disadvantages to both ways, I have this nagging voice saying "you can't test a system in one type of environment (the day session) and then expect the results to apply in a different one (24 hour trading)". I would appreciate your thoughts on the issue.

Thanks,

(1) Objectivism holds that all beliefs, conclusions, and convictions must be established by logical methods of inquiry and tested by logical methods of verification.

 

Both objectivism and Ayn Rand in her personal life seem to have trouble with computations about love.

 

(2) The markets seem to keep doing the same kinds of things, no matter where or when they trade or how we measure them.

 

 

 

A Fancy New 24-Hour Clock

 

might lead you to think

that the markets are somehow different.

 

Clip: http://www.canaries-live.com/

media/time.jpg

Mon, 25 Oct 2004

 

Patterns

Hi Ed!


(1) I use a moving average and mean price to time the pattern breakouts.


(2) Fibo levels to locate stops that move when the market moves


(3) Exit rules determined by the environment which is either one of two variables that are easy to define.

[I have] a lot of work ... on (1) to (3) above but the strike rate without patterns determining entries, is a woeful 30-35% versus the 45%-75% I get when I have manually back tested (13 currency markets over 11 years/approx 4000 signals).

Would appreciate some advice on how I might proceed further.

Translating your notions of "patterns" to computer code may help you clarify your thinking.

Sat, 23 Oct 2004

 

Children


Chief,

Do we learn to teach our kids or are we taught to learn ?

Sincerely,

In the moment, the one is the other.

Fri, 22 Oct 2004

 

Tantra and TTP

Dear Ed,


The author Andre Van Lysebeth in his book Tantra, the cult of the feminine, explores India's history and culture in order to establish a very important, comprehensive and rich study of the Tantra.

I studied it this week and I had the opportunity to see a lot of convergences between the Tantra and TTP regarding the way we see life, feelings, sex and human perception of reality.

It is amazing how the 2 "ways" support each other regarding to concepts such as the now moment, the k-nots, Fred, Under-Fred, feelings and the wisdom of the concept of the passing ahas in life.

If I felt a new meaning for life when I learned about TTP and your amazing view of life, the wisdom I acquired is now expanding with the Tantra principles and Yoga.

I felt a necessity to share this with you and the readers of FAQ, so I just wrote it down. I hope it does not extrapolates the FAQ's non-endorsement rule since the subject of this post is really a matter of comparative study, in the scientific sense of the expression, rather then endorsement of an
author or book.

Thank you again and my very best regards. I wish you and your family all the best.

Yes, TTP seems compatible with many practices of personal growth.

 

Tantra means method or path

 

Lately, tantra connotes the practice of developing the feminine aspect of sexuality.

 

 

 

Tantric Sex and Trend Trading

 

Both dance with the dream

of being able to stay on task

during the entire campaign.

 

Thu, 21 Oct 2004

 

Your Visitation System


Hi Ed,

Ed says, "This visitation program is available to Tribe leaders who are graduates of any Workshop."

We have ... an open invitation for you  ... Half of our members have been to IV TT ... I am ready for your next workshop of expanding my profitable trading growth. See you soon.

OK.  I am open for visiting Tribes early next year.

Fri, 22 Oct 2004

 

October 2003 Workshop Update

Dear Ed,

It’s been a year since the October 2003 workshop in Reno—here’s a summary of the progress I’ve made since then:

If you’ll recall, I was a “day trader” back then. A mechanical intraday stock trading system had worked very well for me during the period 1998—2001. However, that system’s profitability slowly evaporated. (In hindsight, this was as inevitable as night following day.) I endured the better part of two years barely profitable and increasingly frustrated as I vacillated between various short-term trading approaches. By the summer of 2003, I was at the end of my trading rope—I spent all day in front of the screen obsessing over ticks, my stomach contorted, my thoughts a roller coaster of emotion. At the end of the trading day I was left spent and dejected—there wasn’t a lot of energy left for my wife and kids.

I had memorized the Market Wizards books from cover to cover, I could quote passages from “Reminiscences of a Stock Trader,” I had spent thousands of dollars on trading seminars, logged thousands of hours analyzing charts, indicators and systems. Yet there I sat a marginal trader. It seems that I knew all about successful trading—I just couldn’t trade successfully.

I remember discovering your Trading Tribe site and reading something you wrote along the lines of: “Your own psychology is likely to contribute more to your success than your system.” This hit me as absolutely true. As I read other traders’ experiences with TTP, I realized I should explore the process. Nonetheless, I was ambivalent about attending the workshop. TTP seemed a bit exotic--the idea of revealing emotions publicly to strangers made my stomach churn. However, with encouragement from my wife, I summoned the courage and signed-up.

At the workshop, I was initially very self-conscious and uncomfortable. In my daily life, I had been displaying a façade of confidence and success to my trading friends and peers. It was not easy to drop this veneer. But, as the workshop went on, I gradually came to accept the awkwardness that I felt as I revealed my feelings of doubt and low self-esteem. As the workshop progressed, it felt very refreshing to interact free of the facade. To share feelings with a non-judgmental, empathetic group of peers was a wonderful thing.

My “snapshot” I chose during the workshop was “integrative trading.” I wanted to make stock trading a part of my life, not my entire life. I did not want to be distracted when my family deserved my full attention. At the workshop, I realized that crucial to reinventing my trading was an honest examination of the emotions that were driving my trading and my life. The TTP allowed me to do this. With the help of the receivers at the workshop, I understood that I had been hyper-trading as a way to keep myself from feeling lots of stuff.

 

While high on price action, I was avoiding lots of “bad” feelings. Of course, as I’ve come to appreciate, they couldn’t be avoided indefinitely--Fred doesn’t like to be ignored. (I’m reminded of the old margarine commercial: “It’s not nice to fool Mother Nature!) Fred kept turning up the intensity to the point that either I quit day trading or something was gonna blow.

Anyway, a year after the October 2003 workshop, I have realized my snapshot: I created a trading style that was right for me. I no longer day trade. I have developed a very simple stock trading system: I buy when I get a signal, put on a trailing stop, and hold until the trend ends. Manage the risk. Over the last year my average holding period has been three weeks. I’ve held many positions well over a month. An eternity for a former day trader!

 

Using very modest leverage, my return year to date is 35%--this using a long only approach in a flat/down stock market. Back-testing shows that with more leverage I could realize better returns for accounts tolerant of more risk. But, the best part of my system is this: I get to walk my kids to and from school every day. I feel great about the quality time I spend with my family.

I now have a new snapshot that I creating with the help of our local tribe: Financial Freedom. I would like to maximize my trading system in order to achieve this goal. To this end, I’m contemplating managing other people’s money. A stockbroker for years before I quit to trade full time, I’ve been very reluctant to take on clients again. And now that I am seriously considering managing money, a stack of emotional stuff has appeared. So I’ve decided to attend the upcoming workshop in November. Hopefully I can get some advice on undertaking a money management business, while also beginning to work on the issues that are cropping up. Back at the 2003 workshop, I was a complete TTP novice, so some of things that transpired flew over my head. Now that I know a bit more about TTP, I expect to be able to better appreciate the upcoming workshop experience.

Finally, I would like to extend my heartfelt thanks to you for the great service you have provided to myself and the community of traders out there. I’ve spent years now in the brokerage and trading world and unfortunately there are so many in this business who are only looking to extract what they can for their own personal gain. Your willingness to invest so much of your time and energy giving rather than taking is a great inspiration to me.

Sincerely,

Yes.  Your story can inspire others to join a Tribe and engage the process.

Fri, 22 Oct 2004

 

Intentional Community

Mr. Seykota,

I am a big fan and absolutely fascinated with your works. I am currently living in Washington DC and I tried to contact the local Intentional Community leader in the area but I cannot get a response back. I would love to be involved with your Trading Tribe but living on the East coast does not permit that. Do you have any suggestions as to how I can get involved in the whole process. I am eager to listen, learn, and overall participate.

Thank you for your time,

See the Tribe Directory Link above for how to join / start a Tribe.

Fri, 22 Oct 2004

 

Bible Class

 

Chief Tahoe,

This week I started reading the Bible. I am only halfway through Genesis and I already have FOUR nice aha’s:

1) First Fundamental Analysis in the history of mankind (Gen. 3): Serpent and Eve discussing the ‘whys’ and ‘why-nots’ of eating the fruit of the tree of knowledge. Result: A very, very, very bad trade against the flow. Ultimate account destruction…loss of ability to live in the here-and-now … death.

2) First Tip in the history of mankind (Gen 3): Adam listening to Eve and trading on her analysis/recommendation. Very bad trade indeed. Very much like Jesse Livermore holding up the cotton market based on Percy Thomas’ analysis. And look at his excuse when God confronted him: “The woman whom YOU gave to be with me, SHE gave me fruit from the tree and so I ate.” Jesse Livermore: “But I was not myself, I was another man – a Thomasized person.” Notice the lack of SVO-p language.

3) Commitment and the power of intention: Abel and Jacob are deeply committed to God. Their intentions to do the ‘hard work’ are unadulterated. Abel sees exaltation in doing good to others (Gen 4) and God looks upon him with greater favor than he looks upon Cain who does not seem to be able to master his craving. Jacob buys the first-born rights from Esau (Gen. 25) and with them the responsibility to deliver the Hebrew seed to the promised land of Abraham. So he receives all of his father’s blessings (Gen. 27).

4) First documented hot seat in history (Gen. 32): Jacob grappling with himself all night. I believe the Angel he grapples with is Fred. He has a lot of somatic feelings including the pain in the socket of his thigh joint. This is very similar to the stomach, chest, neck, and head aches we feel when we do hot seats in TT. Since this is Jacob’s first hot seat, the pain stays with him a few days [as happened with me with my first hot seat]. The hot seat takes all night. By the time it is over, Jacob feels peace and great clarity. His feelings are now aligned with his intention, with his system. He is committed to his mission of ‘building’ a Hebrew nation, with all the hard work and sacrifice that it entails. First order of business, he changes his name to “Israel.”

Regards,

The forbidden comestible is from the tree of the knowledge of good and evil. The admonition is: don't eat judgment fruit.

 

 

Partaking of the Tree

of Understanding

 

Expensive for Adam and Eve.

Expensive for Traders.

 

Clip: http://www.fractalus.com/

kerry/gallery2/tree.html

 

Fri, 22 Oct 2004

 

Stomach-o-Meter & Risk


Ed Says: The 25% optimal bet size is for a very specific situation: namely, a coin flip process that pays 2:1 with a 50% chance. You know your exact risk in advance (your bet size).

In actual trading, even with stops, you cannot predict your exact risk.

You might also like to consider if your gut can actually withstand the kind of drawdowns that a string of 25% losses might produce.

Yes. As I see it, the coin flip example provides us with constant luck and payoff while in historical simulations we have the average luck and payoff, which may vary in between, and in actual trading. Moreover, slippage and a lot of other operational and emotional risks are not taken into consideration in back-testing.

Ed Says: In actual trading, you might consider taking small non-correlating positions, each with a 1/2 % risk to stop, up to a total of 25%.

With this plan, your winners and losers tend to average out so you get the same overall gain with a smoother ride (less volatility).

I am going to work with only one or two (highly correlated) markets and so I am likely to define optimal fraction with the stomach, after thorough simulations of course.

Yes.

 

 

 

Risk Management Clarifies

 

when you are willing

to experience your stomach.

 

Clip: http://myke.trecento.com/

arc_img/people/hodge_christina/tummy.jpg

 

Thu, 21 Oct 2004

 

Doing Some Reading

Hi Ed,

I just wanted to say thanks for some of the books (see resources). Some of the stuff takes a few days to sink in before I realized the significance.


I've been in NYC trading off and on as a Market Maker for 5 years now. (now working on refinement of a trend system) Watt's book really hit me hard in the sense that I have been using "Hunch-Centric" trading and I was mainly missing the a lot of the calculation and refinement of what my ideas are ... (hard to realize as I was successful with my previous methods - probably overly so as I was trading oil and gas stocks at the time of near the time of 9/11- "funny - mentals" had a lot to do with market movement). Anyway seems to make sense to me now. The year or so required in almost any floor product - is to learn physically the calculation of positive expected return. Strange that I missed this stuff as I'm an engineer.

Le Bon's book has also been helpful in clearing up a lot of mind blocking greed - amazing to realize that the environment changes for humans - but everyone effectively gets about 70 years and follows similar trends.

Also finally got a hold of original article from Donchian - could only find it in Chicago - suprisingly not in NYC).  Suprising to me that some of the adds are selling hope like the ones in some of the periodicals today.

Anyway just wanted to say thanks for some of the recommendations.

Your Risk stuff was good too.

Yes. Gustav Le Bon talks about the powerful effects of a group on the individual.  We also use this effect in TTP to facilitate personal growth.

 

 

 

All in Favor Say, "Aye."

Aye, Aye, Aye, Aye

 

In some organizations, members learn to  think one thing and say another.

 

In The Trading Tribe, we use group pressure

to encourage members to align and experience their own feelings.

 

http://www.tc-forum.org/

images/tc-forum/001-1.gif

 

Thu, 21 Oct 2004

Depression

Dear Ed,

Last night on the hot seat I fully experienced depression and sadness by going through in first person what it likes with my fiancée on her deathbed.

 

I don't have a clear message for its positive intention though. I somewhat feel that it is a warning signal about pending or even existing threats to something that is important to me, and thus help me stay focus to what I have NOW. Is my session "complete" if I cannot arrive at a crystal clear positive intention message? Thanks.

As an aside, I was struggling to really experience the feelings and was pondering quitting (I guess that's one effective way to avoid feelings) until one receiver asked, "Are you willing to experience depression?"

 

Knowing the answer is a resounding yes, off I go and never look back. One thing I do learn about receiving is to share the sender's feelings: one way to validate the sender, instead of roaringly cheer him, is simply to softly empathize.

Thanks for all the teachings.

You might consider taking your desire to complete things into the process.

 

Empathy can be a form of understanding, agreement and, ultimately judgment.

 

TTP simply acknowledges forms without trying to understand or judge them.

 

Stopping to develop understanding and empathy generally interferes with TTP.

 

 

 

Empathy Belly

 

This multi-component, weighted “garment” enables female and male wearers to simulate and “experience” more than 20 of the typical symptoms and effects of pregnancy.

 

Through this hands-on, experiential type of learning, wearers find out what it feels like to be pregnant and gain a realistic understanding of the changes and demands imposed by the pregnant condition.

 

Clip: http://con.uc.edu/cater/

Skillssim/database.htm

 

 

 

Thu, 21 Oct 2004

 

Trending Sectors -vs- Correlation



Ed,


You've said that when selecting the markets to trade, one might want to consider taking
small non-correlating positions. You've also said that it's desirable to select markets from trending sectors / groups.

By definition, if at a given point in time one selects markets from trending sectors, are they not, at that moment, correlated and therefore at odds with the above statements ?

Yes.  At the moment two markets simultaneously hit buy stops, they correlate tightly, particularly in the very short term.

 

To diversify, include an instrument that breaks out while others sleep.

 

For example, take stocks from different sectors - or commodities from different groups.

 

Silver and soybeans might break out the same day and thus correlate well in the very short term. 

 

A portfolio of silver and soybeans provides more diversification that a portfolio of silver and, say, more silver.  

 

The opposite of diversification is plunging, betting it all on one horse.

 

 

 

Oklahoma Hedge

Long Spot Silver /

Long July Silver

 

Oklahoma Butterfly

Long Spot Silver /

Long July Silver /

Long September Silver

 

 

Hedging Guide For Plungers

 

according to Oklahoma Slim.

 

Thu, 21 Oct 2004

 

Weird Science

Ed,

It is interesting to me that the work of Bohm is mentioned a couple of time in recent FAQs. His work, along with Pribram's and a few others has always resonated well with TTP for me. In fact, I gave you a book at the last workshop that explores the holographic model of the universe. I did not know I was going to give you that book when I brought it along with me to Reno. I did not even know why I brought it, other than to occupy me on airplanes, etc.

The workings of the under Fred network are mysterious when viewed from the perspective of the traditional model, but elementary under the holographic every-piece-as-the-whole model.

 

Thanks for receiving.

Yes. TTP practitioners who have relationship AHA's routinely report Bohm Phenomena: an associate inexplicably changing, simultaneously, at a distance.

 

 

The "Simultaneous" Go Master

 

is actually just playing

Fast-Cycle Sequential Go

 

Clip: http://www.european-go.org/

oza2002/photos/32-simultaneous-kids.jpg

Thu, 21 Oct 2004

 

Trading Team

Hi Ed,

I read FAQ this morning and notice a passage that implies you have an intention "to develop a team of traders the likes of which the world has never seen." I am writing to let you know that I am pleased to be a part of the team.

 

Your intention (I assume it is yours, though it may just be all of us) seems to be manifesting as results. I anticipate more dramatic results as we / you continue to clarify the intention. I know I am part of the team, as I speak to other traders from the May workshop that have similar intentions and results.

 

Perhaps at some point the team acts more as a cohesive unit (like a baseball team for instance). Right now we seem to work as independent operatives (along with our sub-teams of tribe members), checking in to headquarters every now and then to
report results and send and receive support with other team members.

I am totally committed to my intention of becoming the best trader and person I can be and using my right livelihood to help others. The Trading Tribe is consistent with my intentions, so I stick with it. I continue to "wash potatoes" and experience the AHAs as they come. If you want to speak to me about any specific actions to further your / our team building intention, I am right here flowing toward right livelihood. It is exciting to be a part of such happenings.

See you in November!

OK.

 

 

 

A Team is a Group

that works together

 

to accomplish things

 

like helping the coach

to stand up again.

 

Clip: http://www.iit.edu/alumni/updates/

yearbook/1940s/images/

illinois%20tech%20basketball%20team

%201946.jpg

 

Date: Thu, 21 Oct 2004

 

Exploring



I used to fear exploring, now I explore the fear!

Thank you

OK.

Thu, 21 Oct 2004

 

Man and Machine


Hi Ed,

I've been a full-time trader for the last 8 years, trading equities (for myself and for clients) on the Indian stock exchanges.

I've had mixed results:

The first 3 years were stupendous - my accounts were up more than 50 times (that's 5000%) during that period.

During the next year, I was down about 75%.

During the next 4 years, I've performed indifferently, and my trading equity today is almost exactly where it was 4 years ago.

Ed, I've been reading your site for about 6 months now. I've been fascinated with your work ever since I first read the Market Wizards interview. I've read most of the FAQ on the site, too. I'm eager to join a Tribe, and have been in touch with the leader of the Chennai Tribe in India. However, Chennai is about a thousand miles from Mumbai, and so geographical considerations make it difficult for me to join. I intend to start a Mumbai tribe (or join one, if someone else starts one before I do), but don't yet wish to commit to that.

For the first 3 years of my professional trading career, I used a predictive approach, based on the Elliott Wave Theory. While my results were spectacularly good when my predictions were right, they were also spectacularly bad when the predictions were wrong. I have now abandoned that approach. I have actually concluded that I was very lucky to have done as well as I did during that initial period.

I've spent most of the last few years developing a Trend Following System for myself, and now believe I have one that shows potential. However, I am struggling with an issue that I am finding it difficult to resolve satisfactorily.

I am aware that FAQ does not recommend system-specific parameters, so I shall generalize my question to the following: "Do you believe that it is desirable that a good trading system allow for NO discretion on the part of the trader? Do you believe that a trader is making a compromise by settling for a system that continues to give him SOME discretion in the day-to-day decision-making process?"

I ask this question because I am finding it VERY difficult to completely eliminate my role in the entry/exit decision-making process.

In conclusion, Ed, I wish to say to you that in all my years, I have never come across another human being who is as generous and helpful as you are. I thank you for the work you are doing, and look forward to meeting you some day.

Regards.

All mechanical systems have some discretion and all discretionary accounts are subject to the mechanical nature of the trader.

 

Elliott Wave does not appear to predict anything; it tends to serve as justification for  hunches.

 

 

 

The Borderline

 

between man and machine

is fundamentally ambiguous.

 

Clip: http://www2.unil.ch/fra/HistLitt/

Cours/XVIII-XIX/18-1.Machine.htm